Mercantile Law Solved MCQs.

(i) Which of the following contracts is Voidable, where:
(a) A party is induced by undue influence 
(b) One party under mistake of fact
(c) Both parties under mistake of fact (d) None of these

(ii) In case of willful wrong a sub-agent is responsible to:
(a) Agent (b) Principal (c) Sole agent

(iii) A tender notice amounts to:
(a) Proposal (b) Offer (c) Invitation

(iv) A contract to sell the property by a minor through guardian is:
(a) Void (b) Voidable (c) Valid

(v) How many parties are there in a contract of guarantee?
(a) 5 (b) 4 (c) 3 (d) None of these

(vi) Which of the following is eligible to become director of a company?
(a) Minor (b) Un-discharged insolvent
(c) Person representing a creditor (d) None of these

(vii) Extra-ordinary general meeting of a company includes:
(a) Annual general meeting (b) Statutory meeting
(c) Plenary meeting (d) None of these

(viii) Petition for winding up of a company may be moved by:
(a) Auditor General (b) Advocate General
(c) Company Judge (d) None of these

(ix) The Companies Act repealed by the Companies Ordinance, 1984 pertained to the year:
(a) 1930 (b) 1933 (c) 1935 (d) None of these

(x) Penalty for improper use of word “Limited” is:
(a) Fine (b) Imprisonment (c) Imprisonment with fine (d) None of these

(xi) In which of the following an arbitration agreement is not discharged by the death of party:
(a) Voluntary (b) Statutory (c) Contractual (d) None of these

(xii) The assent of arbitrator appointed by court is:
(a) Optional (b) Not required (c) Necessary (d) None of these

(xiii) The number of Arbitration Act, 1940 is:
(a) XI (b) XV (c) XX (d) None of these(X of 1940)

(xiv) Nature of misconduct justifying removal of arbitrator should be:
(a) Legal (b) Moral (c) Procedural (d) None of these

(xv) Suit by unregistered firm against third party is:
(a) Maintainable (b) Barred (c) Permissible (d) None of these

(xvi) The firm and firm-name are:
(a) Synonymous (b) Interchangeable (c) Different terms (d) None of these

(xvii) The partnership is:
(a) Juristic person (b) Juridical person (c) Natural person
(d) None of these

(xviii The maker of a promissory note is liable as:
(a) Principal debtor (b) Principal Creditor
(c) Undercharged surety (d) None of these

(xix) Valid presentation of a cheque is within six months from:
(a) The date it is drawn (b) Date of last correction
(c) Date of delivery (d) None of these

(xx) An exception to “No one can transfer what he does not have” is:
(a) Registered gift (b) Will (c) Estoppels by owner (d) None of these

(1) When an offer can only be accepted by the performance of the person to whom the offer is made, is characteristic of:
(a) bilateral contracts; (b) unilateral contracts;
(c) implied contracts; (d) None of these
(2) A tells B, “If you stood first in the class, I’ll pay you Rs.5000.00. B stood first in class and A paid him Rs.5000.00. Which of the following is correct?
(a) A and B had a unilateral contract;
(b) A and B had an executory contract;
(c) A and B had an executed contract;
(d) None of these
(3) A offers to sell B his motorcycle at some time in the future. B accepts. Is there a valid contract?
(a) Probably not, the terms are not definite;
(b) Probably yes;
(c) Definitely not because A failed to communicate the offer;
(d) None of these
(4) Which of the following is not an effective way to terminatean offer?
(a) By rejection; (b) By acceptance;
(c) By counter offer; (d) None of these
(5) A offers to sell B his collection of rare books for Rs.5000.00. Before B even has a chance to accept, A says, “Sorry, I changed my mind, no deal.” This is an example of:
(a) Revocation; (b) Rejection;
(c) Counter Offer; (d) None of these
(6) A and B enter into a contract in which A agrees to deliver milk to a restaurant. They forget to include a price in the agreement. A court will:
(a) refuse to enforce the agreement;
(b) select the lowest quoted price for milk and insert it into the contract;
(c) determine a reasonable price and insert it into the contract;
(d) None of these.
(7) A agreed to supply food for Walima to B at 1: 00 pm. However, he could hardly supply the food at 5: 00 pm.
(a) B can reject the delivery;
(b) He can not reject the delivery;
(c) B must accept the delivery;
(d) None of these
(8) Which of the following actions an unpaid seller can not take against a buyer:
(a) Lien; (b) Stoppage in transit;
(c) Sale; (d) None of these
(9) When a partnership is found liable for a debt, which assets are first used to pay the debt?
(a) Individual assets of the partners;
(b) Personal property of the limited partners;
(c) Partnership assets. (d) None of these
(10) A partnership involves three essential elements. Which of the following is not one of those elements?
(a) An equal right in the management of the business;
(b) Limited liability for breach of contract;
(c) A joint ownership of the business
(d) None of these
(11) Which of the following actions requires the unanimous consent of all partners before it may be undertaken?
(a) Hiring a new employee
(b) Purchasing new office equipment;
(c) Admitting new partners;
(d) None of these
(12) An Order Instrument is the one which is payable to:
(a) A named person; (b) To a bearer;
(c) To both (d) None of these
(13) A bearer Instrument is the one which is payable to:
(a) A named person; (b) To a bearer;
(c) To both; (d) None of these
(14) A holder in due course is the one:
(a) Who finds an instrument;
(b) Who steals an instrument;
(c) Who gets an instrument as a gift;
(d) None of these
(15) For the incorporation of a limited liability company filing of Memorandum of Association is essential:
(a) for a public limited company only;
(b) for a private limited company, a public limited company and an unlimited company;
(c) for a Public Limited company only;
(d) None of these
(16) A subsidiary company is the one:
(a) which holds the majority shares of another company;
(b) which deals in the trading of shares of other companies;
(c) in which the majority shares are held by another company;
(d) None of these
(17) A is considering different forms of business organization for his business. For the purposes of owning property and being a party to litigation, forms which are legal entities separate from their owners include:
(a) Limited Partnership only;
(b) Private Limited Companies only;
(c) Both Private and Public Limited Companies
(d) None of these
(18) A decision made by arbitrators is called:
(a) Sentence; (b) Award;
(c) Judgment (d) None of these
(19) An empire in an arbitration reference is appointed when the number of arbitrators is:
(a) Odd; (b) Even;
(c) More than 10. (d) None of these
(20) The appointment of a person of the minor age as an agent is:
(a) Void; (b) Valid;
(c) Voidable (d) None of these